Importance of Accounting Ethics

Ethics is a branch of philosophy that judge human beings on wrongs and rights concerned with the nature of value and the standards by which human actions can be judged .The term is also applied to any system or theory of moral values or principles. Accounting is the mechanism that offers information regarding the financial position of the organization or business. This type of information is critical to investors as it provides them with important and detailed information that could turn out to be the determining factor as to their decisions to invest or not to invest in a particular organization. Accounting in business is one of the most important departments. Ethical and professional accounting forms a clear financial image of a business, and allows managers to make informed decisions, keepsinvestors abreast of developments in the business, and keeps the business profitable. (Osanyin, 2008) In accounting, there is the professional ethics that guides the accounting profession. Accountants are expected to adhere to the set ethical standards which are designed to ensure that they behave in a way which is ethical and consistent. For most professional accounting organizations, accountants are certified in order to comply with ethics and they are stripped off their certificates if they fail to abide with ethical codes. Therefore, it is common to find unethical behavior in accounting profession. Some of the forms of unethical behavior in accounting are, Providing erroneous information regarding expenses incurred in business Giving out false information on expenses purposely is unethical. In accounting profession, the accountant should always provide the correct information regarding any expenses as failure to do so make the financial status of the business to be false. This affects the profit and loss reports of the business and consequently affecting the performance of the business in the long run. Exaggerating business revenue

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...Ethics in Accounting
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Systematic body of theory and knowledge
Extensive education process for its members
Ideal of service to the community
High degree of autonomy and independence
Code of ethics for its members
Distinctive ethos/culture
Application of professional judgment
Existence of a governing body
Attributes of a profession
• Service ideal
• Market control view
The service ideal vs. the market control
view
Accountants work in:
• private companies and government organizations as
accountants, internal auditors, budget offers, financial
controller
• consulting organizations as advisors to the public
• public accounting firms as auditors
Accountants work in different
capacities
Accountants’ work affects people both within and outside the
organization
• Employees of the entity
• Shareholders
• Bondholders
• Government
• Public in general
• Financial institutions
• The profession
• The environment
Stakeholders
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Integrity
Objectivity
Professional competence and due care
Confidentiality
Professional behaviour
Professional codes of ethics
a) Many high profile companies failed in the US, Europe, and
Australia during the last decade.
• Enron
• Worldcom
• Parmalat
• HIH
b) More 60 finance companies failed in New Zealand since
2006.
• Bridgecorp Ltd
• Nathans Finance NZ Ltd...

...﻿NICHOLAS LOBASSO
ACCOUNTING 4160
DR. KALBERS
9/22/14
ETHICS PAPER
The ethicality of Fiona’s consulting decision can be analyzed using the Applied Ethical Decision Model (AEDM). Under this model, the case at hand can be analyzed using different ethical theories, and interestingly enough the conclusions drawn can be different. Ethical theories help to frame a question and they help in highlighting the aspects of the case that might be overlooked if the case is analyzed on economical terms. The theories can also help explain and defend what you think is right, but in the end you must draw your own conclusion.
The first test for ethical decision making are sniff tests. These are questions you can ask yourself when pondering if something is ethical or unethical. Questions like: would I be comfortable if this action or decision were to appear in the news with my name on it? Will I be proud of this decision? Is this action or decision in accord with the corporations mission and code? These are all great sniff tests that can lead to the most ethical decision. In Fiona Mcintosh’s case it is obvious to me that these sniff test questions ring an alarm towards the unethical end of the spectrum. The first Principle in a CFP board member’s Code of Ethics and Professional Responsibility is integrity. Integrity demands honesty and candor, which must not be subordinate to personal gain and advantage. The ultimate source of trust for a...

...than half of the accounting majors are women. Also, not all CPAs are squeaky clean and respected for their honesty. Some are quite dishonest and are putting a black mark on the image of the entire profession. There is one area where the CPA profession has fallen short of protecting the public interest. The general duty that accountants owe to their clients and the other persons who are affected by their actions is to "exercise the skill and care of the ordinarily prudent accountant" in the same circumstances. Two elements compose the general duty of performance: skill and care. Another element and responsibility is owed to clients and other persons, that is that accountants should observe a standard of ethical or social responsibility. One set of difficulties concerns ethics education's ability to instill the chosen values and to make them stick after the educational process is completed. Instruction in accountingethics is directed at people whose character-or lack there-of-has largely been formed by the time the instruction occurs. Although such instruction should increase the moral awareness of those who are already predisposed to listen, its effect on the basically self-interested, indifferent, or unethical is questionable. Even those who are positively influenced by ethics instruction, moreover, may still behave irresponsibly if their careers or their livelihoods require them to act in their...

...Assignment 1: Review of AccountingEthics
The New Zealand Institute of Chartered Accounts (NZICA) represents over 33,000 members in New Zealand and overseas. The organization audits private companies and public companies that are members of the organization (Graham, 1960). In October 2012, the organization was found to be practicing breaches of accounting with its members when an employee of the organization was found investing in different companies using client’s money. The loans were supposed to be short-term loans but it turned out they were not, this was discovered after complaints from clients.
1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer. In recent times the NZICA has faced several cases of accounting ethical breaches. There were unpredictable increases and collapses of chartered accountants. From every corner, voices rose demanding accountability, demanding tighter regulation and unethical practices to be brought to justice. Clearly, those at fault should have been punished. However, in order for ethical principles to apply it must be shown that the institution is inherently moral or ethically responsible (Graham, 1960). Secondly, an adequate discussion of what accountingethics is should be provided...

...Ethics are an important part of society, as these are standards that people should live by in their everyday lives. Within the world of business especially though, ethics play a huge role. Having bad ethics in the work of business can seriously damage a person’s firm and ultimately ruin their career. In the field of accounting, ethics are most important in order to be a successful account that is looked up upon. This can be due to the fact that accountants work very closely with their clients and on a personal level too. There are a set of principles, or rules that accountants must follow in order to stay within the code of ethics. If one does not follow these guidelines, the penalties are crucial. In order to stay an ethical accountant, you should follow the principles which are integrity, objectivity, confidentiality, and professional competence as well as behavior. If these five policies are followed, one will not have any issues when I come to ethics in their workplace.
Integrity is a concept of people’s values, morals, and actions. Everyone needs good integrity especially in the area of business. In the world of ethics, integrity can be seen as being honest and truthful. Accounts need good integrity in order to be successful with their customers. Being straightforward with your customers as well as other business relationships is a must to have integrity...

...AccountingEthicsAccountingethics is primarily a field of professional ethics, the study of moral values and judgements which are applied to the accountancy. “Accountingethics can be defined as a set of distinct guidelines for a business to maintain clean balance sheets, accounting for their profits, losses and expenses incurred and prevent it from mishandling financial reports and statements” (Buzzle 2011). The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, investors, managers, and other users of the financial reports rely heavily on the financial statements of a company in order to make some big decisions and investments. And in the current business world, due to more and more business frauds and corporate collapses came out, attention has been drawn to ethical standards accepted within the accounting profession.
In China, I often heard about that many companies act in some immoral ways, for example, preparing three books, overstating/understating their assets or net income, overstating the cost of inventory, and so on. The companies which misstate or hide some financial information may bring some substantial benefits to them in a temporary short time. This is the most obvious reason for the accounting frauds. As far as I know, preparing three...

...Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization.
Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following:
1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices.
2. Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into.
3. Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the...

...Morality in Accounting
Abstract:
Morality is an indispensable part of the almost all aspects of our society, and still, we need the moral and ethical rules to constrain our behavior. As a kind of ideology, the profession morality is been influenced by the multi-culture, besides, it is a code of conduct to adjust the random of the society also the big impact in the accounting activities. When comes to the accountancy profession morality, it is a sum of the accountants’ moral conscious, norms and behaviors in the process of dealing with the accounting events. The Confucianism is thousands of years’ culture, and nowadays, which is recognized by the worldwide. In the following of the article, it will focus on the relationship between the Confucianism and the profession morality in accounting, and express the thought about the function of the Confucianism in the development of ethical obligations in accounting.
1.The Confucianism and Accounting Professional Ethics.
All of the basic principles of accountingethics are apparent in any situation in which someone needs to make a judgment under pressure, since an accountant is basically a judge in financial matters, whose judgment becomes especially important when large sums of money are on the line (Michael Pakaluk and Mark Cheffers 2010)1. The...